The Changing Dynamics of the Aircraft Manufacturing Industry
Four years ago, Airbus achieved a significant milestone in the aviation industry. For the first time in its history, a greater number of its passenger aircraft were in operation globally compared to those manufactured by its long-standing rival, Boeing. Since that pivotal moment, Airbus has only strengthened its presence in the market, solidifying its position as a leader in the aviation sector.
Restoring Boeing’s competitive edge will be one of the formidable challenges facing its newly appointed chief executive, Kelly Ortberg, who took the helm last week. To reverse the current market dynamics, Ortberg must navigate a series of industry-wide challenges that are affecting both manufacturers, while simultaneously achieving a string of successes—beginning with streamlining aircraft production.
Saïma Hussain, an analyst from AlphaValue, an equity research firm, commented, “Boeing is facing a situation that is considerably more challenging than Airbus. While Airbus continues to capture market share, Boeing is in a phase of recovery.”
The two companies form a duopoly in the global passenger aircraft market; however, Airbus has notably outpaced Boeing in both production and sales in recent years. According to data from Cirium, an aviation data provider, Airbus has delivered more than 3,800 aircraft to customers since the beginning of 2019, whereas Boeing has managed approximately 2,100 deliveries during the same period.
Despite this competitive landscape, both companies are currently grappling with the challenge of meeting customer demand for new aircraft as global travel continues to rebound. The urgency for faster production rates has become paramount, particularly as airlines are eager to expand their fleets to accommodate rising passenger numbers.
During a panel discussion at the recent Farnborough Air Show near London, Campbell Wilson, the chief executive of Air India—an important customer for both Boeing and Airbus—expressed his frustrations: “Is it frustrating? Of course. Would we love to receive more aircraft more quickly? Absolutely.” However, he also highlighted a shared sentiment in the industry, stating, “We’re all facing similar challenges. We’re all in this together.”
